May 28, 2023

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Are cryptocurrencies still investments of the future?

High volatility and high risk of losses are a real challenge of virtual currencies.

Cryptocurrency transactions continue to be popular all over the world, including in Romania, regardless of how volatile their price is from day to day. However, high volatility and high risk of losses are a real challenge of virtual currencies.

In this context, an important question arises: what do experienced traders do to turn precisely the volatility of digital currencies into an investment advantage? Well, they always keep in mind at least three fundamental principles in this field.

1. The control of … volatility

Compared to traditional markets, the digital currency market is characterized by much higher volatility. For better control of volatility, a good solution to consider is contracts for difference – cryptocurrency-backed CFDs – as an alternative to hard-to-manage virtual currency exchanges.

Crypto Exchanges, virtual currency exchanges, are not yet regulated by any official institution. This increases the risks. In addition, exchanges can always be the target of hacker attacks. On the other hand, brokerage houses provide access to trading platforms that provide leverage when trading CFDs based on cryptocurrencies.

In this case, the investor does not actually own the virtual currencies, but, as in the case of CFDs for shares or currency pairs, trades their “price”. For example, at XTB, brokerage house on international exchanges, they are included in the offer CFDs with support on the most popular cryptocurrencieswhich allow us to invest even when the price falls.

2. Portfolio diversification

A portfolio as diversified as possible reduces risks, offering more chances to win, but also to limit losses. Apart from the classics Bitcoin and Ethereum or the more recent arrivals like Ripple or Litecoin, the XTB offer now includes CFDs with support on ELROND, IOTA, NEO, TRON and many others.


Its creators, three Romanians from Sibiu, claim that ELROND is a high-performance blockchain and is capable of supporting up to 15,000 transactions per second. The ELROND network has had as its main goal since its foundation precisely the so-called “scalability”. This term refers to the number of transactions that can be supported in real time.


Reflecting as it were the dream of all sci-fi movie lovers, the “Internet of Everything” was established as a network for the exchange of values ​​and data. The Berlin-based IOTA Foundation was established with the goal of achieving a free data and value exchange. For example, money or data can be transferred without transaction fees in a decentralized environment. In the case of classic Bitcoin, all transactions are permanently recorded in a public ledger called the “blockchain”.

All Bitcoin “miners” around the world contribute to the maintenance of this “ledger” in an open, public way. IOTA, on the other hand, is one of the first virtual currency projects that is not based on any “blockchain”, being thought of as a network for devices connected to the Internet. Electronic devices in all homes or businesses can “communicate” by sending and receiving data using the IOTA Tangle. IOTA therefore uses a state-of-the-art graphics technology, Tangle, without the need for “miners” as in a classic blockchain.


NEO, also called “Ethereum of China”, wants to be a platform on which anyone can trade, but also create decentralized products or services. The ultimate goal of NEO is to build a network-based economic system. This is very similar to the American Ethereum network.


TRON is a platform for accessing entertainment materials. Its creators wanted to change the way users share content with each other. Creators produce and upload various digital materials, videos or just collages of images and texts. TRON virtual currency is used by users to access the contents they want.

3. A powerful trading platform

Digital currencies have come under the scrutiny of authorities in various countries. Announcements of new regulations often lead to sudden price movements. In order to avoid being caught by surprise, we need to be aware of the news in the market.

At the same time, it is useful to have access to prices in real time, and such a thing is only possible with the help of a high-performance trading platform such as xStation5. Using xStation5, thanks to the built-in calculator in the command window, we can set type orders Stop Loss or Take Profitextremely useful when investing in CFDs.

More than 100 IT developers work daily at XTB to improve the xStation5 trading platform so that it suits everyone, both novice and experienced investors. A modern and efficient, easy-to-use platform is the ally and main resource of any investor.

Warning of risks

Any opinions, research, analysis, prices or other information provided under the title of general market commentary do not constitute investment advice. XTB shall not be liable for any loss or damage including, without limitation, any loss or gain that may arise directly or indirectly from the use or reliance on such information. Please note that information or research based on historical data does not guarantee future performance or results. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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